On January 1, 2016, Yukon Company agreed to grant its employees two weeks vacation each year, with the provision that vacations earned in a particular year could be taken the following year. For the year ended December 31, 2016, all twelve of Yukon's employees earned $1,200 per week each. Eight of these vacation weeks were not taken during 2016. In Yukon's 2016 income statement, how much expense should be reported for compensated absences?

The correct value is $9600.

Explanation:

As the complete question is not given, the complete question is attached herewith.

Since 8 vacation weeks were not taken during 2016 , Yukon's 2016 income statement should report  $9,600 ( 8 * $1,200) .

Journal Entry :

                                                                                  Debit          Credit

Salary expense                                                  $9,600

Liability – compensated future absences                         $9,600

( To record vacations earned but not taken)